Houston can learn a lot from the decades of success from Silicon Valley, according to this Houston founder, who outlines just what all the city needs to do to become the startup city it has the potential to be. Photo via Getty Images

Anyone who knows me knows, as a Houston Startup Founder, I often muse about the still developing potential for startups in Houston, especially considering the amount of industry here, subject matter expertise, capital, and size.

For example, Houston is No. 2 in the country for Fortune 500 Companies — with 26 Bayou City companies on the list — behind only NYC, which has 47 ranked corporations, according to Fortune.

Considering layoffs, fund closings, and down rounds, things aren’t all that peachy in San Francisco for the first time in a long time, and despite being a Berkeley native, I’m rooting for Houston now that I’m a transplant.

Let’s start by looking at some stats.

While we’re not No. 1 in all areas, I believe we have the building blocks to be a major player in startups, and in tech (and not just energy and space tech). How? If the best predictor of future success is history, why not use the template of the GOAT of all startup cities: San Francisco and YCombinator. Sorry fellow founders – you’ve heard me talk about this repeatedly.

YCombinator is considered the GOAT of Startup Accelerators/Incubators based on:

  1. The Startup success rate: I’ve heard it’s as high as 75 percent (vs. the national average of 5 to 10 percent) Arc Search says 50 percent of YC Co’s fail within 12 years – not shabby.
  2. Their startup-to-unicorn ratio: 5 to 7 percent of YC startups become unicorns depending on the source — according to an Arc Search search (if you haven’t tried Arc Search do – super cool).
  3. Their network.

YC also parlayed that success into a "YC Startup School" offering:

  1. Free weekly lessons by YC partners — sometimes featuring unicorn alumni
  2. A document and video Library (YC SAFE, etc)
  3. Startup perks for students (AWS cloud credits, etc.)
  4. YC co-founder matching to help founders meet co-founders

Finally, there’s the over $80 billion in returns, according to Arc search, they’ve generated since their 2005 inception with a total of 4,000 companies in their portfolio at over $600 billion in value. So GOAT? Well just for perspective there were a jaw-dropping 18,000 startups in startup school the year I participated – so GOAT indeed.

So how do they do it? Based on anecdotal evidence, their winning formula is said to be the following well-oiled process:

  1. Bring over 282 startups (the number in last cohort) to San Francisco for 90 days to prototype, refine the product, and land on the go-to-market strategy. This includes a pre-seed YC SAFE investment of a phased $500,000 commitment for a fixed min 7 percent of equity, plus more equity at the next round’s valuation, according to YC.
  2. Over 50 percent of the latest cohort were idea stage and heavily AI focused.
  3. Traction day: inter-portfolio traction the company. YC has over 4,000 portfolio companies who can and do sign up for each other’s companies products because “they’re told to."
  4. Get beta testers and test from YC portfolio companies and YC network.
  5. If they see the traction scales to a massively scalable business, they lead the seed round and get this: schedule and attend the VC meetings with the founders.
  6. They create a "fear of missing out" mentality on Sand Hill Road as they casually mention who they’re meeting with next.
  7. They block competitors in the sector by getting the top VC’s to co-invest with then in the seed so competitors are locked out of the A list VC funding market, who then are up against the most well-funded and buzzed about players in the space.

If what I've seen is true, within a six-month period a startup idea is prototyped, tested, pivoted, launched, tractioned, seeded, and juiced for scale with people who can ‘make’ the company all in their corner, if not already on their board.

So how on earth can Houston best this?

  1. We have a massive amount of businesses — around 200,000 — and people — an estimated 7.3 million and growing.
  2. We have capital in search of an identity beyond oil.
  3. Our Fortune 500 companies that are hiring consultants for things that startups here that can do for free, quicker, and for a fraction of the extended cost.
  4. We have a growing base of tech talent for potential machine learning and artificial intelligence talent
  5. A sudden shot at the increasingly laid off big tech engineers.
  6. We have more accelerators and incubators.

What do we need to pull it off?

  1. An organized well-oiled YC-like process
  2. An inter-Houston traction process
  3. An "Adopt a Startup" program where local companies are willing to beta test and iterate with emerging startup products
  4. We have more accelerators but the cohorts are small — average five to 10 per cohort.
  5. Strategic pre-seed funding, possibly with corporate partners (who can make the company by being a client) and who de-risk the investment.
  6. Companies here to use Houston startup’s products first when they’re launched.
  7. A forum to match companies’ projects or labs groups etc., to startups who can solve them.
  8. A process in place to pull all these pieces together in an organized, structured sequence.

There is one thing missing in the list: there has to be an entity or a person who wants to make this happen. Someone who sees all the pieces, and has the desire, energy and clout to make it happen; and we all know this is the hardest part. And so for now, our hopes of besting YC may be up in the air as well.

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Jo Clark is the founder of Circle.ooo, a Houston-based tech startup that's streamlining events management.

As much as leaders may wish the labor market were not so competitive, it is important to accept the reality and take action. Photo via Getty Images

How Houston businesses can attract tech talent amid a tight labor market

guest column

It is no surprise to recruiters that, despite high profile layoffs at major corporations, the labor market remains tight, especially in the tech industry.

According to data from McKinsey from the first half of this year, more than 80 percent of tech workers who were laid off found a new job within three months. Many of them found jobs outside of the tech industry, where technically skilled employees are in increasingly high demand.

If small businesses want to remain competitive, they need to evolve their hiring strategies. One answer to expanding the talent pool is skills-based hiring. Unlike traditional recruitment, which focuses mainly on applicants with college degrees or direct experience in their field, a skill-based hiring approach prioritizes specific competencies.

Research from LinkedIn revealed employers who practice skills-based hiring are 60 percent more likely to have success with hiring. A winning skills-based hiring strategy will identify diverse candidates, promote internal upskilling and accelerate the hiring process.

Find diverse candidates

Conventional hiring strategies tend to overlook many of the diverse candidates who benefit from skills-based hiring. One important aspect of skills-based hiring is connecting with these groups, who may not apply through traditional pipelines like online applications, employee referrals, or job fairs.

For example, candidates such as veterans, parents reentering the workforce and people without a college degree may not have the same connections as traditional applicants. Yet they often bring transferable skills and an ability to learn, enabling them to succeed in the role.

To expand their talent pool, businesses can start by connecting with organizations and events in Houston that target diverse groups. For example, the Texas Veterans Commission recommends that employers reach out to their local Texas Workforce Solutions Center to link with veterans seeking employment.

By making an effort to connect specifically with underrepresented groups, small businesses and startups can quickly deepen their pool of available talent.

Provide internal upskilling

Skills-based hiring focuses on the competences employees have already. Through upskilling, however, employers can internally train candidates to take on a new role or hire candidates with strong learning potential. Upskilling is the practice of offering ongoing learning and development (L&D) opportunities to employees to close skill gaps.

Upskilling opportunities cannot only expand the talent pool by enabling employers to train candidates on the job. They can also attract more applications across the board because they are in high demand from job candidates. The American Upskilling Study from Gallup found 57 percent of workers were “extremely” or “very” interested in an upskilling program, especially Black and Hispanic workers.

For small businesses trying to stay competitive, upskilling is an essential component of a skill-based hiring approach.

Accelerate the hiring process

Time-to-hire is telling about the effectiveness of an organization’s recruitment process. When recruitment drags on too long, candidates may accept another offer or grow disengaged with the process. Meanwhile, open roles may go unfilled. Unsurprisingly, LinkedIn data has found over six in 10 HR leaders named time-to-hire as their most important metric for success.

Small businesses and startups who want to increase their competitiveness should start by calculating their current time-to-hire. Once they understand the situation, they can analyze their approach for weaknesses.

Some of the most effective solutions to improve time-to-hire could include redesigning the application process, streamlining interviews, implementing an applicant tracking system or refining job descriptions. The goal is a highly efficient recruitment process that identifies qualified candidates and puts out an offer as soon as possible.

As much as leaders may wish the labor market were not so competitive, it is important to accept the reality and take action. Much like larger corporations, small businesses and startups will find the upper echelon of talent when they embrace skills-based hiring as the future of recruitment.

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Jill Chapman is a director of early talent programs with Insperity, a leading provider of human resources and business performance solutions.

A Houston HR expert shares three tips for hiring top talent in a competitive market. Photo via Getty Images

How Houston small businesses can stand out when competing for in-demand talent

Guest column

As the economic recovery gears up, small business owners increasingly need to hire and retain the best talent available in their industry. The challenge for small- and medium-sized business owners is how to compete with large corporations that offer competitive compensation and benefits packages. The key is appealing to top-notch talent in a historically deep candidate pool -- and company culture can help small businesses stand out.

It has been proven that when small business owners concentrate on culture, identify what motivates employees and enjoy getting the job done, top-notch talent will follow.

Below are a few ideas for how small businesses can complete for top-notch talent:

Shape a winning company culture

Company culture means more than state-of-the-art facilities and amenities like free snacks. Company culture is an experience that will become part of the employee identity. Culture embodies many aspects of the organization including opportunities for advancement, company leadership and values. These details and more can shape a company's culture.

Small business owners also should try to look beyond the job description to identify like-minded individuals who align with the company's values. Employees who are strongly aligned with the company's mission can foster a positive workplace and a team that is happy, engaged, productive and committed. Top performers will be much more inclined to join the team and stay for longer tenures when given an opportunity to develop and advance in an uplifting environment.

Get attention with uncommon benefits

Agility is a tremendous advantage that small businesses have over their larger counterparts in the competition for top talent. Benefits unique to small businesses include accessible senior leadership and quick timelines for advancement. These and other advantages to small businesses can tip talent in their favor in lieu of the potential competition's higher salary.

Today, more traditional benefits have progressed to include mental, physical and emotional health and wellbeing. Small businesses can consider creating or updating an Employee Assistance Program (EAP). Through an EAP, employers can offer unique benefits such as online therapy sessions or meditation apps. Additional offerings can include telemedicine services, expanded sick-leave, financial wellness programs or childcare assistance. Even more generous programs include online fitness subscriptions, free food delivery, streaming services memberships or reimbursement for remote-work expenses such as home office supplies.

Look for skills from other industries

As the post-pandemic economic landscape continues to evolve, talent acquisition is evolving with it. If recruiting for a new position, small business owners may find highly qualified individuals who may be seeking a career change or looking to tap into a new industry. It is important for small business owners to be open to experience across industries, which can bring new depth to a team.

Competing for top-notch talent is one of the many challenges for small businesses. By evaluating company culture and how it impacts employees at their core, small business owners will be on par to compete with large corporations for the ideal candidate. And once on board, quality employees will want to stay.

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Jill Chapman is a senior performance consultant with Insperity, a leading provider of human resources and business performance solutions.

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Biosciences startup becomes Texas' first decacorn after latest funding

A Dallas-based biosciences startup whose backers include millionaire investors from Austin and Dallas has reached decacorn status — a valuation of at least $10 billion — after hauling in a series C funding round of $200 million, the company announced this month. Colossal Biosciences is reportedly the first Texas startup to rise to the decacorn level.

Colossal, which specializes in genetic engineering technology designed to bring back or protect various species, received the $200 million from TWG Global, an investment conglomerate led by billionaire investors Mark Walter and Thomas Tull. Walter is part owner of Major League Baseball’s Los Angeles Dodgers, and Tull is part owner of the NFL’s Pittsburgh Steelers.

Among the projects Colossal is tackling is the resurrection of three extinct animals — the dodo bird, Tasmanian tiger and woolly mammoth — through the use of DNA and genomics.

The latest round of funding values Colossal at $10.2 billion. Since launching in 2021, the startup has raised $435 million in venture capital.

In addition to Walter and Tull, Colossal’s investors include prominent video game developer Richard Garriott of Austin and private equity veteran Victor Vescov of Dallas. The two millionaires are known for their exploits as undersea explorers and tourist astronauts.

Aside from Colossal’s ties to Dallas and Austin, the startup has a Houston connection.

The company teamed up with Baylor College of Medicine researcher Paul Ling to develop a vaccine for elephant endotheliotropic herpesvirus (EEHV), the deadliest disease among young elephants. In partnership with the Houston Zoo, Ling’s lab at the Baylor College of Medicine has set up a research program that focuses on diagnosing and treating EEHV, and on coming up with a vaccine to protect elephants against the disease. Ling and the BCMe are members of the North American EEHV Advisory Group.

Colossal operates research labs Dallas, Boston and Melbourne, Australia.

“Colossal is the leading company working at the intersection of AI, computational biology, and genetic engineering for both de-extinction and species preservation,” Walter, CEO of TWG Globa, said in a news release. “Colossal has assembled a world-class team that has already driven, in a short period of time, significant technology innovations and impact in advancing conservation, which is a core value of TWG Global.”

Well-known genetics researcher George Church, co-founder of Colossal, calls the startup “a revolutionary genetics company making science fiction into science fact.”

“We are creating the technology to build de-extinction science and scale conservation biology,” he added, “particularly for endangered and at-risk species.”

Houston investment firm names tech exec as new partner

new hire

Houston tech executive Robert Kester has joined Houston-based Veriten, an energy-focused research, investment and strategy firm, as technology and innovation partner.

Kester most recently served as chief technology officer for emissions solutions at Honeywell Process Solutions, where he worked for five years. Honeywell International acquired Houston-based oil and gas technology company Rebellion Photonics, where Kester was co-founder and CEO, in 2019.

Honeywell Process Solutions shares offices in Houston with the global headquarters of Honeywell Performance Materials and Technologies. Honeywell, a Fortune 100 conglomerate, employs more than 850 people in Houston.

“We are thrilled to welcome Robert to the Veriten team,” founder and CEO Maynard Holt said in a statement, “and are confident that his technical expertise and skills will make a big contribution to Veriten’s partner and investor community. He will [oversee] every aspect of what we do, with the use case for AI in energy high on the 2025 priority list.”

Kester earned a doctoral degree in bioengineering from Rice University, a master’s degree in optical sciences from the University of Arizona and a bachelor’s degree in laser optical engineering technology from the Oregon Institute of Technology. He holds 25 patents and has more than 25 patents pending.

Veriten celebrated its third anniversary on January 10, the day that the hiring of Kester was announced. The startup launched with seven employees.

“With the addition of Dr. Kester, we are a 26-person team and are as enthusiastic as ever about improving the energy dialogue and researching the future paths for energy,” Holt added.

Kester spoke on the Houston Innovators Podcast in 2021. Listen here

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